Tellme Networks Inc., the voice portal platform specialist acquired by Microsoft last year, is blazing trails that its parent company may well follow.

Tellme's hosted technology powers mobile directory assistance systems for major wireless

service providers: You dial 411, get an automated system, ask for a number and the voice portal finds it. Now, Mountain View, Calif.-based Tellme seeks partners beyond the telco universe.

That means the company is looking for more traditional solution providers and developers who want to incorporate voice recognition in a customer application -- basically build a voice portal into it. Current customers include American Express, American Airlines, Verizon, AT&T and Domino's Pizza, according to Robert Crissman, general manager of Tellme's partner program.

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Partner opportunity in hosted voice portals

Tellme partners not only reap the usual application development fees for building and implementing the voice portal -- they can mark up per-minute charges to capture recurring revenue as well. The partners -- not Tellme/Microsoft -- bill for their own services and retain that vital customer relationship link.

Unlike Microsoft, "Tellme has been software-plus-services from the get-go," Crissman told SearchITChannel.com at the Microsoft Worldwide Partner Conference last month. The beauty of the hosted services model for large customers is that the service can scale out when demand peaks and scale down again when it ebbs.

The goal now is to recruit "go to market" partners that can generate demand for the services as well as sell and implement them, he said.

"Partners are nervous about software plus services. They want bigger margins and systems integrators who influence deals need ways to get compensated," Crissman said. "Tellme has reseller agreements -- when they sell it they get the professional services revenue from the solution, whether it's on-premise IVR or they take the speech platform, put a front end on the application and get that recurring revenue."

An integrator with a speech practice focusing on call centers could also sign partners to sell the solution and then own the customer relationship and get part of the ongoing revenue.

Tellme is paid on a per-minute usage basis. VARs and partners who build applications flowing through Tellme can mark those minutes up 20% or 30% and pass that on. Since it started its partner recruitment a few months ago, Tellme has signed Dimension Data, Quilogy and SpeechCycle for this push, Crissman said.

Tellme provides partner opportunities with voice-enabling apps

Servion is a solution provider that already works with Tellme on the professional services front. "We'd do the application development to take the airline reservation system and host it on Tellme," said Chris Mills, general manager of the Americas for Princeton, N.J.-based Servion.

What has Mills more jazzed, however, is the prospect of building horizontal applications -- like the commonly used generic password reset application -- that are used across industries, hosting them on Tellme and billing for that business.

On the technology side, Tellme bills itself as a VoiceXML platform, but its innards are decidedly non-Microsoft. It is transitioning from Java-based roots to Microsoft .NET infrastructure. MySQL also touts Tellme as a big customer. Tellme, while owned by Microsoft, has to support all relevant technologies. For example, it is now touting its support for the popular BlackBerry, a huge competitor to Microsoft in the mobile telephony software arena.

As customer self-service applications proliferate at credit card companies, banks and airlines, the partner opportunity for customizing vertical applications grows, IT solution providers say.

But there have been some glitches. First, in 2006, Burlington, Mass.-based vendor Nuance sued Tellme Networks, alleging patent infringement. That litigation is ongoing. To add another layer of complexity, Tellme licensed Nuance's core speech recognition technology years ago, although that will likely transition over to Microsoft's own speech recognition with time.

Tellme competes with BeVocal, a provider of on-demand voice recognition technology that was acquired by Nuance in April 2007.

This M&A activity has shaken some partner alliances. For example, Viecore in Mahwah, N.J., was a big Tellme partner that was acquired by Nuance. Now it is unclear even to Viecore employees whether it will continue to work with Tellme.

Channel partners acknowledged the agita that comes with change. "Tellme may have led in an account with Viecore as the partner, and all of the sudden it can't anymore, but it still can't replace Viecore in those accounts," said one partner working in this space.

Another issue is confusion about where speech is heading within Microsoft itself. The company had fielded its Speech Server as a standalone component but is now offering that capability through its big Office Communications Server 2007 bundle as well as Exchange Unified Messaging.